Flexible Budgets Do NOT Provide

question 32

Multiple Choice

Flexible budgets do NOT provide

• A)expected costs for a range of activity.
• B)budgeted costs for the actual level of activity.
• C)budgeted costs for a predetermined level of activity.
• D)expected costs for the actual performance level.

---

Definitions:

Intercompany Profit

Intercompany profit arises from transactions between units of the same company, requiring elimination during the consolidation process to avoid inflating revenues and profits.

After-tax Gain

The net profit that remains after subtracting the tax due from the total gain of a transaction or investment.

Equity Method

An accounting technique used to record an investor's earnings proportional to their stake in an associates company.

Cost Method

An accounting technique used to value investments, where the investment is recorded at purchase cost without recognizing subsequent changes in market value.